Chiang Mai's property market is expected to reap a windfall from Singapore's latest measures to cool its real estate sector as prices in the northern Thai capital are still lower than those in some other destinations in Thailand.
Announced on Jan 11 this year, the measures _ the seventh round to date _ will likely drive more Singaporean investors to buy properties elsewhere, said Matthew Lin, director of the Chiang Mai-based property developer Summit Global Developments Co Ltd.
"In light of the latest measures and soaring property prices in Singapore, investors will definitely run out of Singapore, as they are not confident whether there will be any other measures at home in the future," Mr Lin said.
Singaporeans are looking for properties in destinations where prices are not high or at their peak. For middle-income investors, top destinations are Johor Bahru in Malaysia, followed by Chiang Mai.
The two cities meet their demand and are also holiday destinations.
"If Singaporeans invest outside their home country, most of them will not go to too-far destination such as London but rather Asian countries such as Malaysia and Thailand," said Mr Lin.
Kuala Lumpur and Bangkok are no longer good candidates. They are crowded and offer a lifestyle too similar to Singapore's. Besides, property prices there are already high.
Compared with the projected 20% capital gain from property investments in Bangkok in 3-5 years, the price increase in Chiang Mai can be as high as 40%. In Hua Hin, Pattaya and Phuket, the prices have already peaked, he said.
After Singapore announced a sixth round of measures in mid-2012, investors from the city-state have shown interest in the company's projects in Chiang Mai.
Since late last year, when the company's project was launched, 10 units at one of its condominiums have been bought by Singaporeans.
According to PropertyGuru, one of Asia's leading property websites, the number of Singaporeans buying foreign properties will likely increase on the back of the measures.
Phanom Kanjanathiemthao, managing director of the property consultant Knight Frank Chartered (Thailand), said the cooling measures in Singapore may backfire like in Hong Kong, where the property market turned sluggish after the government announced measures to deter speculation.
Since most property investors in Singapore and Hong Kong are speculative, the measures are very effective in pushing them away, as it may no longer be possible for them to realise gains as quickly as they anticipated.
In recent years, Hong Kong's property market has boomed on the back of strong demand from buyers from China, prompting regulators to put brakes on speculation.
"It's too soon to estimate how the cooling measures will affect the property market outside Singapore. It may take 3-6 months," he said.
At the company's two exhibitions in Singapore last year, where two condo projects were introduced, Mr Phanom said it recorded total sales of 300-400 million baht. It plans two more this year.
Locations in Bangkok that interest Singaporean investors remained the central business district covering Sathon, Silom, Wireless, Phloenchit and lower Sukhumvit roads.
About the author
- Writer: Kanana Katharangsiporn
Position: Business Reporter